Payne v. Erie Ins. Exch.

Karen Dwyer was the primary driver of a vehicle owned by her father, Alan Dwyer. Alan had forbidden Ameen Abdulkhalek, the father of Karen’s children, to drive the car. The vehicle was insured by a policy in Alan’s name with Erie Insurance Exchange. When Karen gave the car keys to Abdulkhalek and asked him to retrieve the children, Abdulkhalek was involved in an accident after first making a trip to a gas station. The circuit court determined that Abdulkhalek’s use of the vehicle was not covered under an omnibus clause in the policy. The Court of Appeals affirmed, holding (1) an omnibus clause in an automobile policy that extends liability coverage to a permissive owner of an insured vehicle also encompasses a driver who operates the car for the benefit of an individual who has permission from the named insured to use the vehicle; (2) coverage does not extend to that driver, however, if he deviates from the purpose for which he was authorized to drive the car for the benefit of the first permittee; and (3) because Abdulkhalek operated the car for a purpose other than that requested by the Karen, the omnibus clause did not extend coverage to Abdulkhalek. View "Payne v. Erie Ins. Exch." on Justia Law